This report addresses internal control deficiencies we identified during our audit of IRS's fiscal years 2012 and 2011 financial statements and during our agreed-upon procedures work concerning excise tax distributions to the Airport and Airway Trust Fund and the Highway Trust Fund. As part of our financial statement audit, we tested IRS's internal control over financial reporting.11 We designed our audit procedures to test relevant controls, including those for proper authorization, execution, accounting, and reporting of transactions and for the safeguarding of assets and taxpayer information. In conducting the audit, we reviewed applicable IRS policies and procedures, observed operations, tested samples of transactions, examined relevant documents and records, and interviewed management and staff. Further details on our audit scope and methodology are provided in our November 2012 report on the results of our audit of IRS's fiscal years 2012 and 2011 financial statements.